The past hours have challenged the GBP/USD, producing a strong intraday bearish trend. The big news has surrounded Brexit, with U.K. P.M. Theresa May publicly addressing Northern Ireland. At about 10:30 AM EST, May stated that she wanted changes to the Irish backstop, not its outright removal from any Brexit deal. This comment made waves in the forex and injected even more uncertainty to the U.K.’s departure from the E.U.

One week from tomorrow, May is scheduled to head back to Parliament to enlighten members on her Brexit plans. Today’s statement in Belfast regarding the Irish backstop shook things up politically, with many analysts predicting fallout from within May’s own party. Each of May’s trips to Parliament has brought action to the GBP/USD ― the 13 February engagement is certain to be no different.

GBP/USD Technical Outlook

Selling creates more selling, and today’s action in the GBP/USD illustrates this point to a tee. Rates have fallen more than 90 pips, bringing two support levels off of the daily chart into play.

Here are the two support levels to watch as the day rolls on:

• Support(1): 76.4% Current Wave Retracement, 1.2921
• Support(2): Bollinger MP, 1.2918

Bottom Line: At press time (12:00 PM EST), the GBP/USD has posted a session low at 1.2924. In the event that rates push this extreme further, a long trade from support will come into play.

Until elected, I will have buys in the queue from 1.2921. With an initial stop at 1.2899, this trade produces 22 pips on a standard 1:1 risk vs reward management plan.  

Currently, we don’t know a whole lot about how the U.K.’s divorce from the E.U. is going to unfold. There are seemingly a million working parts, each headed in a different direction. Regardless of what we don’t know, March 29 is rapidly approaching. If the final terms of Brexit do not take shape in the next month or so, anything can happen to the GBP/USD.